SM PRIME Holdings, Inc. is expanding in Eastern Visayas region with the opening of a new mall in Ormoc, Leyte.

In a disclosure, the listed property developer said SM Center Ormoc covers 20,000 square meters, with 85% of the space already leased out. Among its stores include SM Supermarket, SM Appliance Center, Watsons, Ace Hardware, Simply Shoes, Surplus, Miniso, as well as Banco De Oro.

The mall also has an al fresco dining area on its second level, and four SM Cinemas, including a Director’s Club Cinema.

“It is SM Prime’s pride and joy to finally open our first mall in the Eastern Visayas Region. SM Center Ormoc will be a great addition to the growing local economy of Ormoc City and the continuously developing province of Leyte. We look forward to more growth opportunities for the people of this region along with SM’s brand of lifestyle and entertainment,” SM Prime President Jeffrey C. Lim said.

SM Center Ormoc brings to 79 the number of SM malls, which include seven in China.

In the first nine months of 2018, SM Prime has opened four new malls, namely SM Center Imus in Cavite, SM City Urdaneta Central in Pangasinan, SM City Telabastagan in Pampanga and SM City Legazpi in Albay.

SM Prime’s 9-month net income climbed 17% to P23.44 billion, after a 16% surge in revenues to P34.91 billion. Its shopping mall business contributed 58% to its revenues during the period.

...very nice move Ikea as SM is the mall that draws the most number of people

Ikea allots P7B for Philippine store

IKEA is set to open its first Philippine store at the Mall of Asia complex by end-2020.

IKEA has allocated an initial investment of P7 billion to set up its first Philippine store, which at a leased area of 65,000 square meters is described by the Swedish furniture retailer as its largest in the world.

Christian Rojkjaer, managing director Ikea Southeast Asia, said the store would have around 9,000 well-designed, functional home furnishing products, and could be the brand’s first stop before expanding outside Metro Manila.

“Everything is open right now. But I could imagine there will be some more stores in Manila and then we’re going further out potentially with e-commerce first, but I think we’re going to focus on Manila for a while,” he said in an interview during the launch of Ikea’s pre-opening website Ikea.ph at the Mall of Asia in Pasay City ahead of the store opening in end-2020.

Asked about the potential other stores, he said: “We don’t know. We are looking into it.”

“The world is changing so fast — big stores, small stores, e-commerce. We are looking at the totality, but we will expand in the Philippines,” he said.

Mr. Rojkjaer said the company, which owns the Ikea stores in Singapore, Malaysia and Thailand, plans to hire around 500 Filipino workers and would create hundreds of spin-off jobs and business opportunities.

Those business opportunities include local partners to support operations in areas such as logistics, food supply, transport, waste management and security.

“Some of them we have found. But we are still looking for clearing all those contracts here. Lots of contracts. There will be lots and lots,” he said.

The Ikea store will be located between Mall of Asia Arena and SMX Convention Center in an area as big as the size of 150 basketball courts. Company officials said the local store will be almost double the size of a typical Ikea big blue-box.

The shop floor will be similar to other Ikea stores but the building will also house a call center and a supersized warehouse to accommodate e-commerce operations in the Philippines. The store opening will also allow shoppers to shop online and get their orders delivered.

Georg Platzer, Ikea Southeast Asia market development manager, told reporters he would be managing the company’s first store in the Philippines.

“In two years from now, I would love to have opened already. Let’s stick to end of 2020 because it’s quite a complex project. You’ll never know what’s going to happen like it’s a big construction site,” he said.

He said P7 billion is the investment for the retail side, which also covers fitting out, stocking, marketing, and staffing the first store for its opening.

“For us it’s always important that we get as close as possible to the places where many people live. We want to be accessible,” Mr. Platzer said, adding that the store should be about a 60-minute driving distance from its target market.

“Metro Manila is quite dense area already,” he said. “There are not so many open spaces like we found here [Mall of Asia] a perfect block, but we’re still positive that we’re gonna find some more and open more touch points in the future throughout Metro Manila, but also why not the whole Philippines.”

A typical IKEA store has more than 55 inspirational room settings. The self-serve warehouse has flat-packed products ready to be taken home. A supervised playroom for kids is available as well as a restaurant.

Sought for comment, Sweden’s Ambassador to the Philippines Harald Fries, said: “Ikea is probably the Swedish company that builds the most on the Swedish brand, on Swedishness. So whenever Ikea comes into a new country it means a lot for strengthening the image of Sweden in that country in a very positive way.”

Separately, SM Prime Holdings, Inc. said it was set to build another mixed-use building in the Mall of Asia complex that will be its first lifestyle city development in Pasay City. The project will house Ikea’s first store in the country, it added.

SM Prime President Jeffrey C. Lim said in a statement that the addition of the mixed-use facility, and the entry of Ikea, “complements the integrated lifestyle we dreamt” for the Mall of Asia complex.

INDONESIAN mini-mart chain Alfamart is planning to open 200 new stores in the Philippines next year, according to a report by Fitch Ratings.

In its report, Fitch said PT Sumber Alfaria Trijaya Tbk (Alfamart) is aggressively expanding its footprint in the Philippines where it partnered with the SM Group.

Fitch said Alfamart currently has 400 stores in the Philippines, after it opened 180 new stores this year.

It noted Alfamart is planning to open 200 new stores, which will bring its Philippine store network to 600 by end-2019.

“Alfamart’s investment risk for its Philippine expansion is mitigated by the strong presence of SM Group in the country…. Fitch expects Alfamart to have access to SM Group’s large business network and tap its widely known brand,” it said.

Alfamart has a 35% stake in Alfamart Philippines, which is under SM Retail, Inc. SM Retail is part of the Sy family’s holding firm, SM Investments Corp., which also has core interests in property and banking.

Fitch also cited similarities between the Philippine and Indonesian market, which works to Alfamart’s advantage.

“Both Indonesia and the Philippines are consumer-driven markets with young populations and expanding middle classes. Both economies have similar income levels of GDP per capita of $3,000-U$4,000. Consumers in both markets also prefer to buy small amounts of bundled products rather than filling grocery carts,” it said.

The mini-mart sector in the Philippines “as untapped and having limited competition,” Fitch said.

“Alfamart chose to expand in the Philippines as it believes it has more potential than other south-east Asian markets, such as Thailand and Vietnam,” Fitch said.

Fitch said Alfamart’s Philippine expansion may partially offset slowing growth in its home country. It noted Alfamart had 75 net store openings in the first 10 months of the year, after closing some underperforming stores.